Henry Ford II, 70, who rescued the Ford Motor Co. from the brink of financial collapse in the 1940s, and during the next 35 years led the automobile manufacturing giant founded by his grandfather and namesake to record levels of profitability, died yesterday at the Henry Ford Hospital in Detroit. He had pneumonia.
Mr. Ford was 28 years old in 1945 when Henry Ford, then 80, named him president of the company, which was owned entirely by the Ford family. The business was losing $9 million a month, its bookkeeping was chaotic and it was lagging dismally behind Chrysler and General Motors.
The younger Mr. Ford reorganized management, dismissed or retired several key executives, introduced new Ford, Lincoln and Mercury models and streamlined accounting procedures. By 1950, profits were $265 million, and by 1953, Ford had overtaken Chrysler. When Mr. Ford stepped aside as chief executive officer in 1979, Ford's earnings were $1.6 billion, the second best year in the company's history.
During his career, Mr. Ford earned a reputation as one of America's leading industrialists, and his name came to symbolize the capitalist ethic in the public mind. He was known well beyond the auto industry as a highly articulate and often blunt executive who did not hesitate to speak out on a variety of social, governmental and economic issues.
He ran his company with a firm and autocratic hand. High-ranking executives who incurred his disfavor often were ousted unceremoniously and without warning or explanation.
In addition to some spectacular successes, Mr. Ford also was responsible for some colossal failures while at the company's helm. Most notable among them was the Edsel automobile, whose very name has entered the language as a synonym for a bad idea.
Many Ford executives had misgivings about the project, but Mr. Ford enthusiastically backed it. The Edsel, named for Mr. Ford's father, was launched in 1957. For many reasons, including production defects in the early cars and a notably unfortunate grill, sales fell far below projections. The recession of 1958 made matters worse. In 1959 the car was discontinued at a loss to the company of $250 million.
Much later Ford's Pinto was denounced as a murderous firetrap with a gasoline tank that was prone to explode in accidents. Although Mr. Ford had stepped down as chief executive of Ford Motor Co. in 1979, he delayed his departure from the chairmanship until March 13, 1980, the day the company was acquitted of criminal charges of reckless homicide in connection with the deaths of three young women in a Pinto.
Other new cars were extremely successful. In 1959, Ford produced the Falcon, the first compact car of any of the Big Three auto manufacturers to reach the U.S. market. Its first year sales record of 417,107 set a record. Later models included the Thunderbird sports car -- immortalized in song by the Beach Boys -- and the Mustang and the Maverick, both of which were largely the creations of Lee A. Iacocca, a young Ford vice president who rose to become president of the company before Mr. Ford ousted him in 1978. Iacocca subsequently became president of Chrysler.
Key executives ousted by Mr. Ford included Arjay Miller, who was abruptly replaced as Ford president in 1968 with Semon E. (Bunkie) Knudsen. Miller, who later became dean of the Stanford University Business School, was one of the original "Whiz Kids," a group of former military officers recruited by Mr. Ford in 1946 to apply modern management techniques -- including a decentralization of managerial authority and assignment of responsibility to top specialists in all major areas -- at the company. Another member of the group was Robert S. McNamara, who served briefly as president of the company before leaving in 1961 to become secretary of defense.
In his later years, Mr. Ford acquired a reputation as something of a swinger. He was married three times and divorced twice, and he was said to have been a two-fisted Scotch drinker who on one occasion led an entire Dixieland band into the swimming pool during a party at a private club. In 1975, while his second wife was out of the country, he was arrested in California for drunk driving in the company of a young model who eventually became his third wife.
"Never complain, never explain," Mr. Ford commented.
Roger Smith, chairman of General Motors Corp., yesterday praised Mr. Ford as a "formidable yet valued competitor . . . . With his passing, the auto industry has lost a legend as well as a leader . . . . He was a brilliant businessman . . . . "
At Chrysler, Iacocca, who was bitterly critical of Mr. Ford after Mr. Ford had fired him, issued a statement saying: "Our industry and all of American business has lost a true leader. His vision and hard work transformed Ford into a great company . . . . Henry Ford and I were friends and colleagues for a lot longer than we were adversaries, and my sympathy goes to his family and friends."
Mr. Ford, who was born in Detroit Sept. 4, 1917, spent his childhood carefully shielded from publicity and protected by company security men against what his family feared might be an attempt to kidnap him. He graduated from Hotchkiss School in Lakeville, Conn., and enrolled at Yale University. At Yale, he hired someone to ghost write his senior thesis, but university officials found out about it and Yale refused to award him a degree.
After Yale, Mr. Ford went to work in the company's River Rouge plant with the idea of learning the business from the bottom up. But in the spring of 1941 when the prospect of being drafted seemed imminent, he joined the Navy and spent the next two years on shore duty.
His father, Edsel Ford, then president of the company, died of cancer in 1943, and his grandfather resumed the presidency of the company. But by then the elder Ford had suffered two strokes, and he was increasingly indecisive and forgetful. He depended heavily on Harry Bennett, a former prizefighter who had ran a secret police organization inside the company to monitor the activities of employes.
Simultaneously, the government was depending on Ford for a substantial amount of war production work, including the manufacture of B24 bombers at its Willow Run plant. Secretary of the Navy Frank Knox decided that Henry Ford II would be more useful at Ford Motor Co. than in the Navy, and on Aug. 1, 1943, he was released from active duty to join the family business as a vice president.
Mr. Ford returned to a company that had no accounting system or property books and an inadequate research and design department. Never in its 40-year history had it undergone an audit. From 1930 to 1941 its output had dropped from 40 percent of all American cars to 20 percent.
For the next two years, Mr. Ford worked as his grandfather's top deputy, while family members, including his mother and grandmother, urged the company's founder to put his grandson in charge of the business. On Sept. 20, 1945, the elder Ford agreed. Mr. Ford's first act was to fire Harry Bennett.
With the end of World War II, Ford and the other auto companies faced a return to peacetime production and a restless United Auto Workers union. Mr. Ford took the trouble to establish good relations with Walter Reuther, a leader of the UAW. The union and Ford signed a labor agreement in early 1946 while General Motors endured a prolonged strike.
Ten years later, in 1956, Ford stock was made available to the public for the first time. There are 262,000 shareholders today, representing about 60 percent of the voting shares. Most of the remaining 40 percent is controlled by members of the Ford family, and, according to the company's proxy statement of April 1987, Henry Ford II owned more than 1.9 million shares.
As Ford's chief executive officer, Mr. Ford also assumed a seat on the board of trustees of the Ford Foundation, the nation's largest philanthropic organization, established by his grandfather in 1936. He resigned that seat in 1977, contending that the foundation, which by then was no longer controlled by the Ford family, had tried to do too much in too many areas and had failed to promote an appreciation of the capitalistic economic system. The Ford Foundation no longer owns any Ford stock.
Mr. Ford spoke out in support of businessmen's responsibilities to hire disadvantaged blacks after the 1967 Detroit riots, and he directed Ford supervisors to make special efforts to hire black workers from Detroit's ghettos. He also played a major role in efforts to redevelop downtown Detroit.
In 1968, President Lyndon Johnson named him chairman of the National Alliance of Businessmen to direct a program involving cooperation between government and industry to find jobs in private industry for the unemployed.
A year later, President Johnson awarded him a Medal of Freedom. For his efforts on behalf of minority employment, Yale awarded him an honorary doctorate in 1972.
Mr. Ford married the former Anne McDonnell in 1940 and divorced her in 1964. In 1965, he married the former Maria Cristina Vettore Austin. They were divorced in 1980, the same year he married Kathleen DuRoss, who survives.
Survivors also include three children by his first marriage, Charlotte Downe, Anne Scarborough and Edsel B. Ford II; one brother, William Clay Ford; one sister, Josephine Buhl Ford, and six grandchildren.